Possibly the worst beer laws in the world

THE GOVERNMENT will be sued this summer by 1,000 pub landlords claiming the right to sell lager under rules designed to protect traditional beers.

If they win under European law, claims amounting to pounds 1.6bn could be made, with tenants of major breweries saying that they have been cheated of the right to sell popular chilled lagers and have instead been forced to pump warm real ales with obscure names.

The Department of Trade and Industry could also be forced to change its beer orders to allow pubs to sell guest lagers.

The Campaign for Real Ale (Camra) has warned that this would lead to the closure of 50-100 small breweries in the UK. Iain Loe, a Camra spokesman, said: "We would be losing a lot of choice and variety. Where they have led, the large breweries have followed, taking up styles revived by small breweries such as porters, stouts and wheat beers."

The cases against the Government are being co-ordinated by a pressure group for pub tenants called Group Action. It is unhappy with the Government's rules for guest beers, which allow pubs tied to major breweries to sell just one brand of beer from another supplier.

In order to promote Britain's traditional beers, the DTI has been insisting that the guest beer be "cask conditioned" - meaning it continues to ferment in the barrel - the key characteristic of real ales, which provides the frothy head which clings to the glass as it is drained.

By contrast, lagers are often pasteurised and gain their fizz from carbon dioxide injected into the drink after it is barrelled. Hence publicans are not able to sell them as guest beers.

Group Action claims that this rule has cheated landlords of the right to buy popular big-name lagers in the open market, where breweries compete for their business and thus offer substantial discounts.

Its writs will say that pubs should have been able to shop around the continent for all types of beers, including lagers, and that the guest- beer rules break EU competition and movement-of-goods laws.

Cases are now being drawn up by solicitors including Charles Russell of Cheltenham, Barron and Co, of Battersea, and Maitland-Walker, of Somerset, whose Julian Maitland-Walker said: "The numbers show that this has had a substantial impact on their businesses. Tenants of public houses have had a rough time in the past five years. They have suffered in particular from contraband beer being brought in from the Continent because of the problems with excise duty."

The Government will also receive a writ from a lager importer, the Bavarian Lager Company Ltd, which will be seeking damages, claiming the cask-conditioned beer orders have helped drive it out of business.

Andrew Ronnan, the firm's owner, said he was unable to survive selling Hell Beer, brewed in Inglstadt, near Munich, to free houses and pub companies, but would have fared much better if he had been able to sell it to landlords as a guest beer.

Inglstadt is the town where the King of Bavaria signed the famous Beer Purity Law that has been transplanted to Germany as a whole. The law means brewers can use only hops, malt, yeast and local water in their beer.

Ironically, this law was used to prevent a French company from selling its additive-enriched brews in Germany. That ruling was challenged by Paris at the European Court of Justice and overturned. Lancashire-based Mr Ronnan hopes the beer orders will suffer the same fate.

"What annoys us the most is that if we had been successful, who would have been the first person knocking at the door? The tax man," he said.

He has already complained to the European Commission, which has held talks with the Government on the subject. Following these, the DTI amended the orders to allow landlords to stock beers that ferment in the bottle as a guest beer as well as cask-conditioned ales. This means pubs will be able to stock guest wheat beers, white ales that are popular in Belgium and Germany.

Mr Ronnan says the amendment is an admission by the Government that its policy was wrong in the first place.

A spokesman for the DTI said that nothing could be further from the truth. "Now that the beer orders have been altered, we feel they are legal as far as European law is concerned," he said.

The Brewers and Licensed Retailers Association said that it wanted the current system maintained, to preserve diversity in British brewing.